Nick Leggett: Political consensus critical to the future of infrastructure

Copenhagen has a well-functioning transport network.
THREE KEY FACTS
Nick Leggett is chief executive, Infrastructure New Zealand.
OPINION
This year Infrastructure New Zealand led two delegations of public and private sector infrastructure leaders to Europe and the UK. The focus was on learning from other countries’ approaches to infrastructure delivery and how a revised system of shared responsibility for planning, funding and delivering infrastructure projects can be achieved here in New Zealand.
A very strong theme emerged across the countries we visited — the importance of a broad political consensus and clear national direction to the delivery of nation-building infrastructure. These system settings drive the global competitiveness of each of the countries we visited — something New Zealand can learn from.
Listening to the experiences of infrastructure leaders in similar-sized countries to New Zealand — Ireland, Northern Ireland and Denmark — confirmed that these countries have worked hard in their long but sometimes fractured histories, to achieve enduring political consensus around infrastructure.
The results are apparent in overarching and successful national infrastructure strategies and strong, consistent, systems where each part understands its place in the delivery of what the nation needs.
In Denmark — which is often held up as leading the way on cycling and public transport — there continues to be significant investment in the country’s roads.
Transport infrastructure in Denmark is not subject to the ideological or cultural jostling it is here. Both sides of the political spectrum adhere to a transport infrastructure plan that provides for all transport modes. There is an all-party forum on transport that meets to discuss transport priorities.
When roads are discussed, Denmark’s Green Party simply withdraws because roads are not their thing.
How very grown up.
Bipartisanship permits systems and processes to be developed that provide policy and delivery certainty. The benefit for the residents of Copenhagen, a similar-sized city to Auckland, is a well-functioning and integrated transport network whether you travel by foot, bike, public transport or private car. Hopefully in that order.
The Danish experience is in stark contrast to the recent history of transport infrastructure planning in New Zealand. We typically get ourselves stuck in a no-win political debate framed by those with rigid views of the world (pro-car and pro-road versus pro-public transport and cycling, for example). Each project is therefore treated as if it exists in a vacuum because that is how our politics has shaped it.
This is not helped by the lack of a nationally co-ordinated planning system, meaning that individual projects stand alone rather than being considered as one piece of a bigger infrastructure puzzle.
New Zealand does not stop to ask itself; what is the kind of country we are trying build? Where are we headed and how can we set up our political system to be an effective delivery mechanism to get us there?
Due to this approach, we suffer from a crippling lack of certainty in our infrastructure sector. Governments change and the policy direction seems to shift almost 180 degrees. This is disastrous, not only for the consistency of our infrastructure pipeline, but also on the capacity and capability of our infrastructure sector to deliver projects when required.
An Infrastructure New Zealand industry survey conducted earlier this year revealed a high degree of concern about the uncertainty of our infrastructure pipeline and the lack of a defined vision and clear strategic objectives for New Zealand’s infrastructure delivery.
It’s difficult for an industry to plan when it doesn’t have certainty, especially when it competes to attract skilled staff in a global labour market.
The outcome for New Zealand hasn’t been great either, as the constant yo-yoing of our infrastructure workforce is a key reason why infrastructure is so expensive to build here. The investments in businesses cases, and planning and preparation can also run into hundreds of millions of dollars — money a small nation like ours cannot afford.
A more mature and unified political environment is critical to improving public trust in infrastructure development and increasing the support and understanding of communities when disruption occurs.
A more bipartisan approach also enables effective responses to emerging challenges, such as adapting to the impacts of climate change and ensuring we build infrastructure that remains resilient and adaptable.
Crucially, greater political consistency and policy certainty can attract more interest from international investors, leading to increased private sector participation and providing more funding and financing options for infrastructure projects. We are essentially competing with our neighbours for investment.
Similarly, Ireland sits between larger markets in Europe and the US and must attract investment strategically. New Zealand must be more ambitious and consistent in our approach to infrastructure decision-making if we are to attract substantial inward investment.
Perhaps things are changing though. The new Government, while aggressively pushing ahead with its own infrastructure plans, is aware of the need to develop an infrastructure delivery system that can survive the winds of political change.
I was heartened by the Prime Minister’s comments during his recent trip to Australia, where he criticised the “on-off, on-off, on-off” nature of our infrastructure development and emphasised the importance of having “mechanisms in place so that we can have bipartisan support so that irrespective of which colour of government is in, the projects still carry on”.
The industry will be watching with bated breath to see if greater buy-in from across the political spectrum occurs.
We aren’t expecting a full-on make-out session between political parties, more just some footsies under the table to ensure certainty for New Zealand’s infrastructure.
Reseach conducted by Infrastructure New Zealand last year showed that we could drive efficiencies of between $2 billion and $4.7b per annum if New Zealand had a more certain infrastructure pipeline.
I fully support the establishment of the proposed National Infrastructure Agency as an independent body that can provide objective oversight and co-ordinate funding and delivery, but its establishment will need to come alongside a focus on the system as a whole.
System leadership is required, and we’ll need to avoid believing that a new body in and of itself will solve our problems.
There will also be significant benefits from the development of city and regional deals as a means by which central and local government can better collaborate to fund and deliver regionally important infrastructure.
The greater use of user charging mechanisms such as road tolling, new public private partnership models and the exploration of GST-sharing with councils are positive steps that can help diversify how we fund and finance infrastructure over the long term.
For these initiatives to be successful they must achieve a level of political consensus and be baked into the way we do things over the long term. We cannot afford for a future Government to come along and cancel them.
Fundamentally, New Zealand has been too reactive and short term in its thinking. Let’s adjust our sights and prepare for the decades and generations to come. The questions should be, what kind of country do we want for our children’s children and how, through the provision of modern first-world infrastructure, can we provide for the future economic and social prosperity of our communities? Surely, this is not too much to ask.
Political consensus and a shared national infrastructure direction will be two of the key themes discussed at Infrastructure New Zealand’s Building Nations 2024 conference.
The conference will address challenges relating to how Aotearoa lifts its infrastructure vision, delivers much-needed systems change, provides greater legislative certainty and builds the social licence for increased infrastructure development.
International and domestic experts will also look at how New Zealand can gain better results from external partnerships, build local delivery capacity, increase productivity within the infrastructure sector, and provide for climate resilience and disaster recovery.
· Infrastructure New Zealand is an advertising sponsor of the Herald’s Infrastructure report. Infrastructure New Zealand is the peak body of the New Zealand infrastructure sector.